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Price and labour productivity in agriculture - comparative advantage of cheap labour

By Andrej Havrila

Abstract

Recently is a "good" discussion about the labour costs (wages). By the example of agriculture we argue that there is no straightforward relations between the raise in productivity and wages. The number of labour work and the total costs of labour in agriculture decreased since 1989. The gross agricultural product (GAP) calculated by the index of agricultural prices (IAP) presents the change in GAP only, not the real value of GAP in CPI. Thus, the productivity per worker and per one SKK of labour costs increased steeply (200 % or 300 %). However, if the calculation of GAP is done by CPI, than the real GAP of 1996 decreased to one third of 1989 GAP. Thus the productivity decreased to 70 % in 1991 - 1992, but recently raised to the quality of 1989. On the other hand, the productivity of labour costs increased to 164 % respecitvely 174 % in comparison to 1989. More-over, the other costs of production decreased to 32 % that of 1989. The productivity of such costs has not changed largely. After decreasing till 1993 it raised to 115 % that of 1989. Thus the productivity of other costs (capital) is not of the quality of the labour cost. Therefore it can be argued, that the problem of agriculture are prices of agricultural commodities, responding to the power on the market.productivity, real wages, gross agricultural production, other costs, comparative advantages

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